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MARKET SURVEY

Amex Lax in Regulation of Improprieties, Magazine Says

April 17, 1999|From Reuters

The American Stock Exchange has been the site of improprieties, including price fixing and illegal trading, that the exchange has failed to adequately police, a report in the April 26 issue of Business Week magazine alleges.

The magazine said its research unearthed allegations that the exchange keeps investigations of potential wrongdoing "in the family," adding that this occurs with the tacit consent of the Securities and Exchange Commission.

The SEC declined to comment on the article to Reuters, and a spokesman for the Amex told Reuters that the exchange has "no comment at this time."

Business Week said the exchange, the SEC and law enforcement officials have failed to adequately investigate several allegations, made by former options trader Edward Manfredonia, of improprieties

However, the Amex said it told the magazine that Manfredonia's allegations were investigated and dismissed as having no merit, and the SEC said his letters containing the charges were forwarded to the appropriate officials.

Outgoing Amex Chief Executive Richard Syron defended the exchange's record as a regulator to Business Week.

The magazine said it conducted a six-month investigation in which it interviewed current and former Amex officials, current and former federal and local regulators, and traders, floor brokers, specialists and clerks.

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